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Brent H. Blakely (SBN 157292) bblakely@blakelylawgroup.com BLAKELY LAW GROUP 915 North Citrus Avenue Los Angeles, California 90038 Telephone: (323) 464-7400 Facsimile: (323) 464-7410 Oscar Michelen (OM 5199) omichelen@cuomollc.com 200 Old Country Road, Suite 2 S Mineola, NY 11501 Telephone: (516) 741-3223 Facsimile: (516) 741-3223 (Admitted pro hac vice) Attorneys for Defendants UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA MASTERFILE CORPORATION, Plaintiffs, v. CHAGA INTERNATIONAL, a Nevada Corporation, STEVE GOULD, an individual, and MICHAEL TIDD, an individual, Defendants. ) CASE NO. CV 12-00850 R (Ex) ) ) MEMORANDUM OF LAW IN ) REPLY TO PLAINTIFFS ) OPPOSITION TO DEFENDANTS ) MOTION FOR SUMMARY ) JUDGMENT IN LIEU OF ANSWER ) ) ) ) HEARING ) ) Date: Monday, June 18, 2012 ) Time: 10:00 a.m. ) Courtroom: 8-2nd Floor ) )

i Defendants Reply Memorandum of Law

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TABLE OF CONTENTS Preliminary Statement .... Argument . I. DEFENDANTS FAILURE TO INCLUDE RULE 56.1 STATEMENT IS NOT FATAL TO DEFENDANTS MOTION AND COURT SHOULD DECIDE MOTION ON SUBSTANTIVE ARGUMENTS RAISED . II. PLAINTIFF RAISES IDENTICAL ISSUES AND FACTS TO ONES RAISED IN CASES PREVIOUSLY DECIDED IN FAVOR OF DEFENDANTS POSITION ON THE IMPROPER REGISTRATION METHOD III. DEFENDANTS AGREE WITH PLAINTIFFS POSITION THAT THIS COURT SHOULD STAY DECISION ON THIS MOTION UNTIL THE NINTH CIRCUIT RESOLVES THE ALASKA STOCK CASE PENDING BEFORE IT . Conclusion 5 5 3 1 1 1

ii Defendants Reply Memorandum of Law

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PRELIMINARY STATEMENT Defendants Chaga International, Steve Gould and Michael Tidd (collectively, Defendants) respectfully submit this Memorandum of Law in Reply to Plaintiffs Opposition to Defendants' Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56. ARGUMENT I. DEFENDANTS FAILURE TO INCLUDE RULE 56.1 STATEMENT IS NOT FATAL TO DEFENDANTS MOTION AND COURT SHOULD DECIDE MOTION ON SUBSTANTIVE ARGUMENTS RAISED While defendants pre-answer motion for summary judgment was unaccompanied by a Local 56.1 Statement of Undisputed Facts, that alone is not reason to deny the motion. The court has broad discretion to excuse a Rule 56.1 violation and decide the motion on its merits. Miranda v. Southern Pac. Transp., 710 F.2d 516, 521 (9th Cir.1983)(lack of Rule 56.1 statement not fatal where issues are clear and concise); Banco Central De Paraguay v. Paraguay Humanitarian Foundation, Inc., 2005 WL 53271 (SDNY 2005)(court may consider 56.1 statement filed with reply papers). Furthermore, where a paper filed in support of the motion comports to the general requirements of Rule 56.1, the court should not deny the motion merely on the lack of a properly entitled Rule 56.1 Statement. Wight v. Bankamerica Corp., 219 F.3d 79, 85 (2d Cir.2000). In this matter, the Declaration of Oscar Michelen filed in support of the motion, meets the general requirements of Rule 56.1. Furthermore, accompanying this Reply Memorandum is Defendants Rule 56.1 Statement which is entirely derived from the Michelen Declaration except that Defendants, in an exercise of caution, have deleted all the paragraphs in the Michelen Declaration to which Plaintiff has objected. The 1 Defendants Reply Memorandum of Law

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Defendants of course have no objection should the court desire to allow the plaintiff time to respond to the Defendants Rule 56.1 Statement. Therefore, the court has two documents which the court can deem comply with Local Rule 56.1 the original Declaration of Oscar Michelen and the Rule 56.1 Statement accompanying the Reply Memorandum. While the defendants request that the court use the Rule 56.1 Statement filed with the reply papers or the original Michelen Declaration, the court can also use the Statement of Genuine Disputes of Material Fact filed by Plaintiffs. The vast majority of the disputes raised in that document are essentially statements of legal interpretation and not per se factual disputes. Even the complete absence of Rule 56.1 statement is not fatal where the relevant facts are developed in the briefs and supporting documents and the issues are concise. Miranda v. Southern Pac. Transp., 710 F.2d 516, 521 (9th Cir.1983); U.S. v. One Hundred and Thirty-Four Thousand, Seven Hundred and Fifty-Two Dollars United States Currency, more or less, 706 F.Supp. 1075 (S.D.N.Y. 1989). In Miranda, the Ninth Circuit overlooked the absence of a Rule 56.1 Statement in support of a motion for summary judgment because the movants brief was consistent with the principal policy underlying Rule 56.1: to obviate the need for the court to scour the record for facts in support of or against summary judgment. Miranda, 183 F.3d at 919 fn2. The issue here is whether the registrations upon which plaintiff relies meet the requirements of the Copyright Act. The court need only look at the registrations (which accompany the complaint) and address the merits of the parties legal arguments with respect to the registrations. This is especially so where, as here, the party moving for summary judgment is not the party with the ultimate burden in the case.

2 Defendants Reply Memorandum of Law

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While it is the burden of the party who moves for summary judgment to establish that there is no genuine issue of material fact, and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); British Airways Bd. v. Boeing Co., 585 F.2d 946, 951 (9th Cir.1978), if, as here, the opponent has the burden of proof at trial, then the moving party has no burden to negate the opponent's claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In other words, the moving party does not have the burden to produce any evidence showing the absence of a genuine issue of material fact. Id. at 325. Instead, ... the burden on the moving party may be discharged by showingthat is, pointing out to the district courtthat there is an absence of evidence to support the nonmoving party's case. Id. The registrations accompanying plaintiffs complaint and the legal arguments raised in defendants Memorandum in Support prove the absence of evidence to support plaintiffs copyright infringement case. The court should therefore decide the motion on its merits and grant summary judgment to defendants. II. PLAINTIFF RAISES IDENTICAL ISSUES AND FACTS TO ONES RAISED IN CASES PREVIOUSLY DECIDED IN FAVOR OF DEFENDANTS POSITION ON THE IMPROPER REGISTRATION METHOD In opposing the motion for summary judgment, plaintiff does not dispute that this method of copyright registration has been invalidated by several courts. Rather, plaintiff seeks to address the same arguments in this case that the unsuccessful plaintiffs all relied upon in Muench Photography, Inc. v. Houghton Mifflin Harcourt Pub. Co., 712 F.Supp.2d 84 (S.D.N.Y.,2010); Bean v. Houghton Mifflin Harcourt Publishing Co., 2010 WL 3168624 (D.Ariz.,2010); and Alaska Stock, LLC v. Houghton Mifflin Harcourt Pub. Co. 2010 WL 3785720 (D.Alaska, 2010).

3 Defendants Reply Memorandum of Law

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The defendants memorandum of law in support of the motion fully outlines the applicable case law and demonstrates defendants entitlement to summary judgment as plaintiff has not distinguished these improper registrations from the registrations in the above cited cases. For example in Alaska Stock, the court set forth the errors in the registrations that caused their invalidation no name of author; in cases where the authors were named, no indication of which author applied to which photograph; and no titles given for any of the works. Alaska Stock, LLC v. Houghton Mifflin Harcourt Pub. Co. 2010 WL 3785720 at page 1 (D.Alaska, 2010). This language applies verbatim to the registrations in this matter. The plaintiff in Alaska Stock also relied upon the letter given to Nancy Wolff by the Copyright Office which purported to validate this registration method as being in compliance with the Copyright Act. On this issue, the District Court of Alaska stated: That procedure also ignored the limitations on registration imposed by Section 103 of the Copyright Act. There is no question but that compilations can be registered by the author of the compilation. Section 103(a) of the Copyright Act expressly provides that compilations are proper, lawful subject matter of copyright[.] 17 U.S.C. 103(a). However, Section 103(b) provides that [t]he copyright in a compilation ... extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. Id. 103(b). Section 103(b) is neither unclear nor ambiguous. Section 103(b) cannot be amended by regulation or informal opinion(s) or advice to claimants by the Copyright Office. . . . But, in this case, those registrations did not effect registration of the copyrights in the individual images that make up the compilations. Id. at page 1, 4. Because plaintiff did not distinguish its registration from the registrations invalidated by the courts in the above cases, this court should follow the direction of those cases and invalidate the registrations herein. Plaintiffs request that the court stay the decision on this motion due to the appeals in the Bean and Alaska Stock case is an admission that they rely on the same flawed methodology used in those cases.

4 Defendants Reply Memorandum of Law

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III. DEFENDANTS AGREE WITH PLAINTIFFS POSITION THAT THIS COURT SHOULD STAY DECISION ON THIS MOTION UNTIL THE NINTH CIRCUIT RESOLVES THE ALASKA STOCK CASE PENDING BEFORE IT While the defendants are confident that they have set forth all the relevant facts and law necessary to award them summary judgment in this matter, the defendants agree with plaintiff that in the interest of judicial economy this court can stay this action pending the Ninth Circuits decision in the appeal pending in the Bean and Alaska Stock matters. Because it is highly likely that any party losing this motion will appeal the courts decision to the Ninth Circuit and because all parties agree that the registration method in this case is the same method that is being evaluated by the Ninth Circuit, staying the decision on the motion until those cases are decided may be the most prudent course, but will respectfully leave that for the courts discretion. CONCLUSION For all the foregoing reasons, summary judgment must be granted to defendants along with such other and further relief as the court deems just and proper. Dated: July 13, 2012 CUOMO LLC By: _________________________ Oscar Michelen (OM 5199) (Pro Hoc Vice) Attorney for Defendants

5 Defendants Reply Memorandum of Law